Company Formation in Romania is a complicated bureaucratic process, we are very well aware of that. For this reason we streamlined the process as much as possible and offer all our experience and talent in dealing with local authorities such as the ONRC (Trade Registry) and ANAF (Tax Man).
In the following text, you will find key data and an executive summary to assess if Romania is the right place for your entrepreneurial aspirations:
What are the benefits of a Company Formation in Romania?
- Extremely low tax rates from 1% up to 500.000 € in revenue
- Very low tax rate for dividends of 8% on dividends emitted
- Limited Liability for the shareholders
- Progressive and politically stable EU jurisdiction
- Very low wage level
- Very low cost of Real Estate
- Lightening fast and affordable communication technology
- A very business friendly environment, also fiscally
- No pre-payments of VAT or Income Tax
- Affordable accounting and fiscal representation
- Access to funds from Romania and the European Union
Under these ideal circumstances, we are not surprised at all, that more and more global players, but also SMEs are setting up branch or shop in Romania.
How much does it cost to form a company in Romania?
We charge 199 € for the company formation in Romania. This does not include the provision of a registered office, registered agent, notary, interpreter, translation or legalization fees. You can find our detailed fee schedule here:
Who can form a company in Romania?
A company in Romania can be formed by any person who exceeds the legal age of 18 years, who can provide a clean track record with the police and who is of mental health. Foreigners with or without residence in Romania can also form a company in Romania, but it is necessary to proof the identity and residence of such an individual.
What is the procedure in order to form a company in Romania?
In order to form a company in Romania it is necessary to file loads and loads of paper work, provide a registered office, name the shareholders and directors, proof their identity and residence, suggest and reserve company names, provide the share capital, describe the nature of business and submit all signed application documents to the trade register.
A notary appointment with a certified interpreter is required and once the company is established, it’s time to register it for tax purpose and to appoint a legal representative for tax affairs, apply for the relevant tax numbers and open a business bank account with a reputable, stable bank.
Which documents do we need from you?
- Proof of Identity (Passport Copy)
- Proof of Residence (Official Document confirming residence)
- Our filled and signed Order Form
- Proof of payment of our rendered fees
We charge all fees upfront and start the work with confirmation of funds.
How long does Company Formation in Romania take?
Many providers will promise you 3 – 7 days, which is technically not possible. Just the name reservation with the trade registry takes about a week, in case they are not refusing the name application which they happen to do from time to time.
Our answer to the question how long a company formation takes, goes as follows:
In case we have received all necessary paperwork from you, we reckon 3 – 4 weeks until we can obtain the original formation documents. You will need the originals in order to open a business bank account, digital copies are not accepted.
Meanwhile we apply for tax numbers and as a consequence, you can open a corporate bank account in Romania.
From filing the documents until your company is fully functional, which means not only formed but also able to receive and send funds from clients or to suppliers, we state a realistic time frame of 4 – 6 weeks.
During the global pandemic we also experienced delays of up to three weeks because of closed or understaffed institutions.
What are the main tax rates in Romania?
In case of a legal entity such as S.R.L. or S.A. the following tax rates apply:
Corporate Income Tax
- 1% up to 500.000 € in revenue if you hire at least one employee who needs to be resident in Romania and socially insured, other requirements apply*
- 16% in case you do not employ an employee, exceed 500.000 € in revenue or generate more than 20% of your total revenue from management consultancy activities or you have more than three companies with shareholdings exceeding 25%.
Withholding Tax
- The Withholding Tax is 8% on dividends
Value Added Tax
- The VAT/TVA rate is currently 19%
The following taxes and contributions are relevant for employers in order to make decisions for wages and the individuals receiving a salary or being self-employed:
Individual Income Tax
- The income tax for individuals in Romania is 10%
Social Security Contributions
- The Social Security Contributions amount to 35%
What is the minimum wage in Romania?
As of 1.1.2023 the minimum wage in Romania is 3.000 RON.
The minimum wage applies for a total working time of 167,33 hours per month.
Can I be employed in my own company as a Director of the Romanian S.R.L.?
Yes, you can be an employee of your own company but it only counts for the Micro-Company Tax Regime of 1% if you are socially secured in Romania which applies only if you have Residence in Romania.
Otherwise you need to hire an individual with Residence in Romania, if you don’t the company has to pay 16% of corporate income tax in Romania.
How can I safe the most taxes running a company in Romania?
The best way to max out the Romanian tax legislative is to establish tax residency in Romania. In this case you can not only be the shareholder and director of the company but you can also be the one employee that is necessary in order to enjoy the 1% Corporate Tax Rate.
In case you receive dividends 8% Withholding Tax are due. In case you don’t receive dividends and leave the company’s nest egg untouched, you only have to pay 1% Corporate Income Tax.
This is a unique and sensational tax regime in Europe and it is also it’s lowest. So, what are you waiting for?
